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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10163
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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We have a small business, an S corporation & partnership. We

Customer Question

we have a small business, an S corporation & partnership. We use a van which belongs to my husband. It is used only for the business. We pay all expenses personally and the business pays us $0.54 per mile. The business does pay for gas for the vehicle. Is that alright?
Submitted: 4 months ago.
Category: Tax
Expert:  Lane replied 4 months ago.

Hi,

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Your intuition that something is not quite right here is good. (So sorry to be the messenger)

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But you must either use the actual cost method OR the stated mileage rate, but not both.

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Actual cost is gas, oil, and all other operating costs (such as maintenance and repair, tires, and depreciation - lease if the car is leased rather than owned).

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the mileage rate (54 cents per mile in 2016) is a proxy (an average of those actual costs).

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So when the business is reimbursing the 54 cents AND paying for gas as well (gas being one of those actual costs that the 54 cents replaces) you are "double-dipping," so to speak.

Expert:  Lane replied 4 months ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here

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Thank you!

Lane

I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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